Combined Heat and Power is an efficient way to generate heat with high cost saving potential. But those aren’t the only reasons you should be considering it in 2015...
With carbon reduction targets looming, and the introduction of mandatory audits like ESOS, 2015 is the perfect time to get to grips with your organisation’s energy strategy and consider investing in low-carbon technologies as a means to not only reduce your carbon emissions but also save a great deal on your energy bills.
Combined Heat and Power (CHP) presents the most significant single opportunity for organisations to reduce energy costs and improve environmental performance. Here are ten reasons why you should be thinking about CHP this year:
1. CHP is a more efficient way to generate energy
Unlike conventional ways of generating electricity where a huge amount of heat is wasted, CHP generates electricity while capturing the usable heat that is produced in this process. CHP plants can have an overall efficiency of up to 80% at the point of use, while the efficiency of a coal fired plant stands at about 38%.
2. CHP can cut your energy bills by 40%
Due to its high efficiency, organisations using CHP can save between 15% and 40% on what they would spend on power sourced from the grid and heat generated by on-site boilers. CHP installation at the Museum of Liverpool has guaranteed them annual savings of more than £500,000,.
3. CHP produces 30% less carbon dioxide
CHP’s single, efficient process means heat requirements are met without the need to burn additional fuel. Carbon emissions from CHP are therefore up to 30% less than separate conventional generation via a boiler and power station.
4. CHP is fuel neutral
CHP systems can run on a variety of fuels, including both renewables and fossil fuels. The options include natural gas, biogas, biofuel, and oil. Natural gas is the most widely used fuel in CHPs in Europe with 49.5% of schemes running on it.
5. CHP provides flexibility of supply
CHP can be used flexibly to complement other forms of energy generation, including renewables. It allows for flexibility in terms of the fuel - the fact that it does not rely on one fuel means it can run on whichever fuel is most readily available.
6. CHP increases security of supply
CHP enables organisations to generate power independently, helping to meet demand and reduce dependence on electrical imports. Some CHP can also work independently of the grid, providing emergency power in the event of a mains power failure.
7. CHP reduces demand on centralised power supplies
CHP reduces the overall demand on centralised power supplies, including large scale power stations fired by coal or gas. This reduces stress on the electricity grid - something which has become increasingly important as power stations across the UK are closed.
8. CHP can provide exemption from CCL
By registering under the CHPQA initiative as Good Quality CHP, organisations can qualify for relief from the Climate Change Levy. A CHP system under 2MWe could qualify for CCL relief of up to £100,000 per year.
9. CHP gives access to government incentives
As well as relief from the CCL, organisations running CHP are eligible for Enhanced Capital Allowances and Business Rates Exemption. Again, the scheme must be registered as Good Quality CHP.
10. CHP can become virtual power plants
Small clusters of CHP systems could actually prove the answer to increasing demand on the UK’s electricity network, preventing the expense of building additional generating capacity. By tapping into existing highly efficient CHP networks, peaks in electrical demand can be relieved, providing a way to decarbonise UK energy supplies while improving power resilience.
With many financing options available, CHP is something that organisations should be considering not only as a way to lower energy spend, but also a way to reduce network demand and meet carbon targets.